Lottery plan would help over 13,000 students

May 7, 2008

Lottery plan would help over 13,000
students/

Senate passes “Energy Efficient Schools
Program”

(NASHVILLE, TN), May 14, 2008 – Over 13,000 more students would receive lottery scholarship funds underlegislation sponsored by Senate Education Chairman Jamie Woodson (R-Knoxville) and considered by the Senate today.  The bill would extend the 2.75 GPA requirements for students to maintain the HOPE Scholarship through the end of their junior year.  It also provides scholarship opportunities to non-traditional students, military veterans, and dependents, those who are dually enrolled in college and high school, students seeking medical degrees who agree to serve rural areas, and foster children.

The State Senate also adopted legislation to use a portion of the excess funds to set up an “Energy Efficient Schools Program” aimed at helping schools save money on their energy bills.  Senator Randy McNally (R-Oak Ridge), sponsor of the measure, said the bill is especially needed to help bolster capital needs of local K-12 schools this year
due to the administration’s cuts in the Basic Education Program 2.0 (BEP) improvements that were slated for distribution this year.

“We will have no money to fund the BEP 2.0 improvements under the governor’s revised budget,” said McNally, who is the Senate Finance Committee Chairman.  “This money will provide funding to schools across Tennessee.  It will be done so in a manner that will produce cost savings in the future that will be realized by the schools year after year, in the future.”

The proposal partners the state with TVA, Oak Ridge Laboratory, and other energy experts by setting up a Council that would guide schools in energy-saving options.  The Council would set up the rules for distribution of the funds, which would come in the form of grants and loans.  The Council could also tap into federal grants from TVA and the Department of Energy available for such “green energy” programs.

The program could result in a savings of 18.5% on energy bills if the schools implement the upgrades and utilize some of the best practices for energy conservation.  The measure is expected to save an estimated $29 million in energy costs for Tennessee schools.

Currently, there is $461.8 million in the lottery reserve account, of which $50 million must be kept in savings under current law.  The General Assembly also benefits from ongoing net revenues of an estimated $11.4 million more than is needed to continue the current programs funded by lottery proceeds.

The constitutional amendment creating Tennessee’s lottery scholarship program adopted  in 2002 approved the use of excess dollars for three purposes.  The amendment listed K-12 construction as the first purpose, new Pre-Kindergarten classes as the second, and after school programs as the third.  The Energy Efficient Schools program would fall under the K-12 construction provision, which is the only facet of the amendment yet to be enacted, even though it was listed first on the ballot.

On the lottery scholarship distribution plan, the bill sets aside $349.5 million to create an interest bearing endowment fund, which together with the $11.4 million will fund all the proposals in the bill, including one for TSAA need-based grants.  TSAA is Tennessee’s primary need-based student assistance program.  Almost all of these students, or 90 percent, have family incomes below $30,000.  The endowment fund would provide $10 million to issue these grants.  The bill would provide over 3,000 more students scholarship opportunities than any other plan submitted to date.  This is in addition to the 950,000 K-12 students that would benefit from the Energy Efficient Schools
Program.

 “I am very pleased that we have been able to put together a fiscally responsible package that will help over 13,000 students receive scholarship money,” said Woodson.  “It by far impacts the most students with the dollars that we have available to us.”

Some of the other highlights of the plan include:

  • Continues funding of $25 million for Pre-K

  • extends the 120 credit hour-limit to five years in order to accommodate any hours lost due to transfer, change of major, or majors requiring more than 120 hours of credit

  • removes home school requirement of two years

  • allows dependents of religious workers who are from the state but who are temporarily overseas to claim Tennessee for scholarship purposes

  • gives students attending two-year institutions with housing the four-year award

  • provides Civic Education Scholarships for exemplary students

  • establishes a Laptop Pilot Program to help students access more online course opportunities

The Senate sent the lottery scholarship distribution plan back to the Senate Finance Committee due to a rule regarding the financial impact of a rural healthcare scholarship amendment added to the bill today.  That amendment, sponsored by Senator Jim Tracy (R-Shelbyville) would set up an endowment to fund scholarships for students pursuing a medical degree and who agree to practice in rural areas of Tennessee.  If approved again by the Finance Committee as amended, the legislation could be back before the full Senate for final consideration as soon as tomorrow.

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